HomeCrypto NewsBitcoin jumps above USD $64,000 following reports of reduced inflation in the...

Bitcoin jumps above USD $64,000 following reports of reduced inflation in the US

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By Hannah Perez

The CPI reading for April showed signs of slowing US inflation, which appeared to provide relief to cryptocurrency traders. Bitcoin rallied more than 4%

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  • US inflation showed signs of slowing in April, up 0.3% for the month and 3.4% year over year
  • Although the reading is still far from the FED’s target, it seemed to give investors hope
  • Bitcoin rose more than 4% in a matter of a few hours, returning to USD $64,000

Rising inflation in the United States showed signs of slowing in April, signaling a stronger economy and fueling investor hopes for an imminent rate cut.

The US Consumer Price Index (CPI), a widely followed tracker that measures the cost of a broad basket of goods and services, increased 0.3% since March and 3.4% year over year, reported this Wednesday the Department of Labor.

The data showed a modest decline from March, when the monthly increase stood at 0.4% and the annual increase at 3.5%. The monthly reading of CPI in April was below economists’ forecasts of 0.4%while the annual reading coincided with what was expected, as noted CNBC.

Other aspects of the report also showed positive signs. Core CPI, which excludes food and energy costs, rose 0.3% in April, down from 0.4% in March, and was up 3.6% year-over-year from 3.8%. % of March. Both readings in line with estimates, while the 12-month core CPI was the lowest since April 2021.

Housing costs, including rental costs, remained stubbornly high, remaining a key factor behind persistent inflation. Notably, housing costs rose 0.4% in April and 5.5% year-over-year, up from 0.4% month-over-month and 5.7% year-over-year in March.

US inflation slows

While the report indicates a slight slowdown in the pace of inflation, the annual reading still remains far from the US Federal Reserve’s (FED) key target of 2%. Inflation had been unexpectedly high in the first three months of the year after falling steadily in the second half of 2023, dimming hopes for a rate cut.

The FED began to increase benchmark interest rates in March 2022, in a bid to control rampant inflation, which has put downward pressure on the markets. In early May, the US central bank decided to keep interest rates unchanged for the sixth consecutive period. Rates remain at a range between 5.25% and 5.5%.

Central bank officials have been reluctant to ease monetary policy until they see clear signs of slowing inflation for several consecutive months. FED Chairman Jerome Powell emphasized this point recently when he abandoned his previous suggestions that cuts were likely to be announced this 2024.

Although analysts agree that the latest US inflation report will not be enough to persuade the FED, the recent drop in the CPI seemed to provide some comfort to investors.

Bitcoin jumps above USD $64,000

Bitcoin (BTC) jumped over the USD $64,000 mark, rising more than $3,000 after the report was released. The rest of the cryptocurrency market replicated the bullish move, with many major coins indicating single-digit percentage gains.

Traditional markets also reacted positively to the CPI release, with futures linked to major stock indices rising and Treasury yields falling, as noted CNBC.

The main cryptocurrency by market capitalization has moved sideways and primarily downward since reaching an all-time high above USD $73,000 in March. Bitcoin It had found resistance in the $63,000 area this week, and was just above $61,000 this time yesterday.

At the time of publication, BTC changes hands around USD $64,500 with a gain of 4.5% in the last 24 hours and 4.4% in the week, according to data from CoinMarketCap.

Bitcoin rebounds above $64,000 after US CPI report. Source: CoinMarketCap

Article by Hannah Estefanía Pérez / DailyBitcoin

Picture of Unsplash

WARNING: This is an informative article. DiarioBitcoin is a media outlet, it does not promote, endorse or recommend any particular investment. It is worth noting that investments in cryptoassets are not regulated in some countries. They may not be suitable for retail investors as the entire amount invested could be lost. Check the laws of your country before investing.

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